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Summary - The lean startup: how constant innovation creates radically successful
What is true and false about startup succes patterns?False:
- a great product can get you anywhere
- Work to perfection
- startups success can be engineered by following the right process
- It's the boring stuff that matters the most
- Entrepreneurship is management
- a great product can get you anywhere
What is 'lean startup' based on?- lean manufacturing
- design thinking
- customer development
- agile development
Who changed the thinking pattern from product and engineering focussed companies to companies that were also focussed on marketing and business?Steve Blank. He called it 'Customer development'
What is Eric Ries' mission?To improve the success rate of new innovative products worldwide
What are the five principles of the lean startup?
- Entrepreneurs are everywhere (they are people who work on new products under extreme uncertainty.
- Entrepreneurship is management (a startup is not a product, but a very uncertain institution that requires a new style of management)
- Validated Learning (Startups exists to build a sustainable business which you do by constantly running experiments to test the vision)
- Build-Measure-Learn (build an idea, test it on customers, preserve or pivot)
- Innovation Accounting (measure progress, set milestones, how to prioritize work -- KPI's)
Why do startups fail?- the allure of a good businessplan, a great strategy and a good market research. This doesn't work because there is to much uncertainty in the world
- management has a 'just do it' attitude. They create chaos in their actions, which doesn't lead to anything. Probably Eric means that they are not customer driven and not measured and learned from?.
What is the most important differentiator to build a 'lean startup'?Feedback loops instead of planning, optimizing the product that may lead to pivot (or persevere in) the strategy. This is best used as the means to measure progress (and succes).
What is lean thinking (Toyota)- Drawing on knowledge and creativity of individual workers
- the shrinking of batch sizes (small sprints)
- Just In Time Production
- Inventory control
- Acceleration of cycle times
Every startup is fuelled by its 'engine of growth', which requires constant and immediate feedback loops. So forecasting is only of limited value. What applies is the 'Build-Measure-Learn' feedback loop, used to optimize the product, operations or the marketing, that in turn may lead to 'pivots' or to decide to persevere on the defined strategy. However, the vision behind a start-up rarely changes.
In order to justify this as 'progress', a lean startup requires different KPIs to succeed.
What does the lean startup encourage entrepreneurs to do?Have a good vision, test it by executing strategies and change them if they don't work, and optimize their products accordingly.
Building a start-up involves managerial discipline, as opposed to 'just do it'. But how to put the managerial discipline into practice for new innovative ventures is not clear to all, which leads to a lot of waste.
The Lean Startup aims to provide this new management paradigm and is based on the Lean Manufacturing approach as developed by Toyota. It primarily differentiates 'value creating activities' from 'waste' as the starting point to judge and measure progress which is differently from the traditional way. This results in 'validated learning'.
As this is a change to the previous way of measuring productivity, people will initially object to this change and perceive it as less efficient. However, as it provides crucial information on whether the (people in the) startup are bulding the right thing much earlier in the process it is more effective due to fast iterations and increased customer insight.
What is the definition of a start-up?A human institution designed to create a new product or service under conditions of extreme uncertainty,
What is the definition of a startup?A human institution designed to create a new product or service under conditions of extreme uncertainty,
Reducing the feedback cycle, allows a startup to generate revenu faster, and killing waste sooner. In addition, prerequisites need to be in place that allow of experimenting, which ignites the feedback cycle ( = validated learning). This is the responsibility of senior management.
Each interaction between a customer and the company should be considered Product.
The Innovator's Dilemma: the difference between incremental improvements (sustaining innovation) and breakthrough new products (disruptive innovation). The latter requires a bottom's up approach, decentralized and is unpredictable.
Running a start-up is to work inside the black box of innovation. This applies to every size, industry and sector of the economy.
The definition of the start-up comprizes: institution, humanS, NEW product, uncertainty. It is this uncertainty that makes most tools from traditional management obsolete.
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What is the most important differentiator to build a 'lean startup'?
What is the definition of a start-up?
What is meant by validated learning?
What does the lean startup encourage entrepreneurs to do?